At a joint Consumer Financial Protection Bureau-U.S. Department of Justice press event earlier this week CFPB Director Rohit Chopra applauded states that have their own versions of the Community Reinvestment Act (CRA), calling for increased resources for states that support their supervision and regulation of nonbank lenders.
California Reinvestment Coalition Chief Executive Officer Paulina Gonzalez-Brito issued the following statement in response to those remarks:
“CRC is in full support of Director Chopra’s comments. Nonbank mortgage lenders make up more than 70% of home mortgage originations. They dominate the market but have no obligation to reinvest in local communities, unlike their bank counterparts. It’s time nonbank mortgage lenders pay their fair share. These lenders need to be subject to closer oversight to ensure that they are not engaging in discriminatory lending, and that they are reinvesting in Black, Indigenous and People of Color (BIPOC) communities as well as low to moderate-income communities.
“California is a leader for this country in many areas. Unfortunately, it has not been able to enact its own state-level CRA framework. California should look to Illinois, Massachusetts and New York, three states that are ahead of the trend, and enact community reinvestment laws that ensure these big mortgage lenders don’t get off scot-free.
“CRC, its members and partners have pushed for and will continue to push for a California-specific CRA that creates an obligation for nonbank financial institutions. The bottom line is that we’re overdue for a California CRA that protects Californians from discrimination and divestment from state-regulated financial institutions, narrows the racial wealth gap, and helps BIPOC build the generational wealth they were denied for so long.”